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Consumers work up an appetite for meal replacements

By CHEN YINGQUN | CHINA DAILY | Updated: 2020-08-31 07:34
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A customer tries KFC's plant-based chicken nuggets at a KFC store in Shanghai. [Photo provided to China Daily]

Wide range of products introduced to market

Beijing resident Zhang Hongwei has not eaten congee, soybean milk or bread-all popular Chinese breakfast staples-for more than six years.

Instead, she favors meal replacement products, including protein shakes and energy bars, which she considers convenient, healthy and good for weight control.

After she lost weight by taking such products for breakfast and dinner for two months, Zhang began to pay more attention to the nutrition her body needs. In recent years, she has also provided professional advice on nutritional management and introduced meal replacement products to more than 1,000 consumers.

"Many people don't know much about the balance of nutrients and energy in the food they eat," she said. "I think the meal replacement industry has huge potential for growth, and the market needs not only products, but also education about healthy eating."

Jason Yu, general manager of Kantar Worldpanel Greater China, said meal replacement products are available in various forms-powder, liquid, shakes and energy bars-that can replace a regular meal. In recent years, some yogurt and snacks have also entered this lucrative market.

Amid rapid economic development and increased awareness of healthy eating, the meal replacement market in China has grown at an annual rate of more than 30 percent in recent years, despite making a late start, according to market research company Euromonitor International. It said the market size in 2017 reached 57.17 billion yuan ($8.33 billion at today's rates) and is expected to hit 120 billion yuan by 2022.

Yu said the market's rise has been driven by growing health awareness, including weight loss, and the demand for greater convenience.

"Consumers need products that are nutritious and easy to carry around," he said. "In the past two years, meal replacements have gained in popularity, especially as Chinese consumers are more aware of the risks associated with obesity."

Gong Menghan, a senior analyst with research company CBNData in Shanghai, said about 50 percent of consumers in China bought "healthy eating products" over the past year, with those born in the 1990s in particular showing increased awareness of this market.

She said an estimated 200 million people in China are overweight, and this could significantly boost the meal-replacement industry. Consumers' increased health awareness, along with a range of demands, including weight loss, muscle enhancement, eating healthily and looking young, have fast-tracked this market.

A CBNData report said that last year some 22 percent of consumers spent more than 1,000 yuan a year on food replacements. More than 60 percent of them take meal replacements at least once a week, and some 20 percent do so once a day.

A total of 52 percent said they bought meal replacements because they were easy to carry around and quickly satisfied their appetite; 47 percent took them to lose weight, while 25 percent viewed them as healthy snacks between meals. More than half the respondents were born from 1990 to 1995.

"Women are the main driving force, and eating meal replacements is not only popular with consumers in first-and second-tier cities-enthusiasm is also rising sharply in third-tier cities and others," Gong said.

Global brands have taken the lion's share of the Chinese market, including Soylent, based in Los Angeles, SuperBodyFuel from San Francisco, and Huel from the United Kingdom.

Domestic food and beverage brands have also accelerated production of new meal-replacement products. For example, China Mengniu Dairy Co has introduced a yogurt with fiber, and drinks giant Hangzhou Wahaha Group Co has rolled out a red yeast rice beverage and a quinoa biscuit.

In early 2018, Cao Peng, founder of Shanghai MySmeal Biotech Co, started promoting and selling the New Zealand meal replacement brand Smeal. During the Singles Day shopping festival on Nov 11, 1 million bottles of Smeal powder were sold on Tmall, generating total revenue of 11.5 million yuan. This was just six months after the company opened a store on the major e-commerce platform, where 30 bottles of the powder cost about 500 yuan.

Smeal powder comes in a bottle, rather than a paper bag. It can be mixed with cold, rather than hot, water and the texture is similar to any liquid drink, rather than being "sticky". The company imports some 60 percent of its raw materials for Smeal powder, both to enhance the taste and to ensure healthier products. For example, cocoa from Belgium and black tea from Sri Lanka are used.

"As the powder is stored in bottles, mixing it with cold water is fun, just like making a cocktail," Cao said, adding that the company started its factory in China to enable it to mass-produce the products with a "special manufacturing technique".

Cao said Smeal sales are rising by 40 to 50 percent a month on average. More than 80 percent of customers are ages 18 to 35, as many young people "prefer convenience, good taste and healthy eating".

Meal replacements must taste good to ensure repeat purchases, Cao said. They should also contain sufficient basic calories and nutrition needed by the body to act as a substitute for a regular meal.

"Every bottle of Smeal provides about 300 calories, which is enough for our customers, 85 percent of whom are women," he said.

In September, Chinese food company Want Want Group launched its healthy snack Fix XBody. Brand manager Zhuang Ya'ru said it is aimed at those who want to lose weight and who love to work out.

The number of calories per serving is marked on Fix XBody packets to help consumers. In addition, the company has developed more than 20 products in four categories: oatmeal and grain powder for breakfast; rice crackers and grain bars for dessert; enzyme jelly and nutritious seaweed for afternoon tea; and sugar-free coffee and oat milk for healthy drinking.

Zhuang said it wants to promote the concept that eating rationally and controlling calorific intake can help with weight loss and healthy living. "We also want to tell consumers that meal replacements are tasty and pleasant to eat," she said.

It took almost three years before the company's products were ready for the market, she said, and since September, Fix XBody total sales have exceeded 1 million yuan.

"We are very optimistic about the future," Zhuang added.

Yu, from Kantar Worldpanel, said the meal-replacement market's growth is promising, as Chinese consumers are constantly adopting healthier diets and lifestyles. There are vast opportunities for specific areas of the market that address different consumer needs.

It is important for brands to develop a healthy growth path without making excessive claims, as is the case with some manufacturing nutritional supplements, he said. Meal replacements are no substitute for a healthy lifestyle, so they need to be taken in tandem with exercise.

"Chinese consumers love food that is tasty, so meal replacements have to taste good in addition to being nutritious," Yu said, adding that educating consumers to develop a healthy lifestyle is also crucial.

Gong, from CBNData, said the meal-replacement market is growing rapidly. More fresh and organic ingredients are being used, more diverse categories developed and an increasing number of large healthcare brands and fast-moving consumer goods are entering the industry.

However, due to the lack of standards and regulations, some companies exaggerate the effect of their products or place false adverts, which could mislead consumers.

"The whole industry needs strengthened regulations and management," she said.

Yang Yuxiang, a senior nutritionist and psychologist in Beijing, said more people are taking meal replacements, but whether these products can help consumers depends on factors such as their nutritional components and whether these are balanced and safe.

"I suggest that consumers eat regular meals as their main source of nutrition and energy, and that other products act as nutritional supplements or temporary replacements for meals," she said.

Yang added that healthy eating alone cannot solve the obesity problem, as a good and balanced lifestyle also includes proper physical exercise.

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